This is the latest in a series of entries looking at what we can expect in 2013. Each weekday, a guest analyst will look at the key challenges facing a selected country – and what next year might hold in store.

By James Shields, Special to CNN

James Shields is professor of French politics and modern history at Aston University in the U.K.He is the first winner of the American Political Science Association’s Stanley Hoffmann Award for his writing on French politics. The views expressed are his own.

While it could hardly be more eventful than 2012, with the toppling of a president and an emphatic swing of legislative power from right to left, 2013 could prove to be more decisive for France. As the electoral promises of the past year recede, they are replaced now by an urgent need to deliver.

The three biggest questions hanging over France in 2013 are a potentially hazardous mix of the political and the economic. How will President François Hollande and his Socialists square their election pledges with the hard choices of governing in economic crisis? How will the center-right UMP recover from its bitterly divisive contest to replace Nicolas Sarkozy as leader and face down mounting pressure from a resurgent far-right Front National? And, as a second credit rating agency downgrades France, can the world’s fifth-largest, and the Eurozone’s second-largest, economy bring its public finances into balance for the first time in almost four decades?

The first of these questions is scarcely new. Since the early onset of recession in the 1970s, French governments have outdone one another in their capacity to over-promise and under-deliver. Elected to implement reform, governments have been blocked in the streets from doing so, then punished in the polling booths for not having done so. In all but one of the eight parliamentary elections since 1978, the governing majority has been thrown out, while a succession of presidents and prime ministers have vied for historic records of unpopularity.

Now it is the turn of President Hollande and Prime Minister Jean-Marc Ayrault. As only the second Socialist president since the foundation of the Fifth Republic in 1958, Hollande must avoid the pitfalls into which his predecessor, François Mitterrand, led the Socialists in the early 1980s with their short-lived and economically reckless pursuit of an untimely “Socialist experiment.” Distant echoes there are. The new president fought a campaign on easy promises to eschew austerity and relaunch growth, while early tax rises on income, wealth, companies and capital gains – including a 75 percent top income tax rate – appeared to herald an old-style Socialist recourse to soaking the rich.

Yet Hollande is no old-style Socialist. A graduate of Paris’s elite technocratic finishing school, the Ecole Nationale d’Administration, he is a pragmatist with a preference for workable over ideological solutions. Hence the €20 billion ($26 billion) cut in labor costs for employers aimed at restoring French economic competitiveness by helping create jobs and close a trade gap measured recently at €70 billion ($92 billion). Hence, too, the deficit reduction program that Finance Minister Pierre Moscovici describes as a “Copernican revolution” in the left’s approach to government. Other measures to boost investment and to reform France’s notoriously rigid labor market are also underway.

Pragmatism, however, can be but a short step away from incoherence. In an early test of the president’s resolve to protect France’s industrial base, the government recently found itself in an ugly confrontation with ArcelorMittal, the world’s largest steelmaker, over its proposal to close two blast furnaces at Florange in north-eastern France at a cost of 629 jobs. The disagreement degenerated into insults by government ministers against the company’s owner, Lakshmi Mittal, who was told he was no longer welcome in France despite owning around 150 sites there and employing some 20,000 workers. The threat to nationalize the disputed site, while conjuring the specter of Mitterrand’s ill-fated “Socialist experiment,” gave the lie to the government’s insistence that France was “open for business.” It was also shown to be mere bravado and soon withdrawn as an option in favor of a complex compromise deal.

Such incoherence is damaging. There is, of course, a ritual element to an incoming president talking tough about protecting jobs. Sarkozy, too, huffed and puffed against lay-offs before seeing unemployment rise by almost a million on his watch. As president and prime minister now struggle to explain the strategic direction of government policy, their popularity ratings have plummeted, with Hollande’s 36 percent approval rate setting a new record for unpopularity at the six-month mark of a presidential term.

Yet if it is true that a factor in good government is strong opposition, then part of this government’s problem is the disarray of its main political opponents. While Socialist ministers were locking horns with ArcelorMittal, the center-right UMP was engaged in a fratricidal feud around the election of its new leader that has split the party down the middle and cast doubt over its ability to hold together.

The leadership contest pitted former Prime Minister François Fillon against outgoing party Secretary General Jean-François Copé. It was also a contest between two different visions of France under a future UMP administration – one economically liberal and socially inclusive (Fillon), the other economically liberal and socially “unapologetic,” code for being tough on immigration and Islam notably (Copé). It was expected that the election would produce a clear direction for the party, setting it either on a more centrist or a more right-leaning course; but the near dead heat resulting from a poll of some 300,000 party members has reopened all the old fault lines that the UMP was formed, in 2002, to seal over.

With Copé’s wafer-thin victory disputed by Fillon’s camp and calls for a fresh vote, the party is effectively leaderless and, for the moment, directionless. This is a dangerous condition to be in, with a new centrist alliance recently formed under the popular UMP defector Jean-Louis Borloo and – more ominously – with the far-right Front National making strong political headway under its new leader Marine Le Pen. She came third in the presidential poll with 6.4 million votes and she has made no secret of her ambition to attract the most right-wing components of the UMP and transform her populist party into the major force on the French right.

Meanwhile, France’s accounts make grim reading. Public debt stands at more than 90 percent of GDP and public spending at 57 percent, a eurozone peak; unemployment is above 10 percent (over 3 million), rising to 25 percent among the young and to much higher levels in some deprived suburbs; and successive downgrades of its vaunted triple-A credit rating have struck a blow at France’s financial standing. Fiscal discipline is hardly a mobilizing electoral theme, and during the campaigns of 2012 there was barely a reference to cutting public spending; but that is a central part of the challenge now facing the president if he is to fulfill his promise to reduce the budget deficit to 3 percent of GDP in 2013 and balance the books by 2017.

Will President Hollande have the courage to press on with reforms where his predecessors retreated? The answer might be: does he have a choice? A recent report by The Economist described France as “the time-bomb at the heart of Europe” and potentially “the biggest danger to Europe’s single currency.” Without necessarily going that far, it is clear that Hollande’s room for maneuver is slim to vanishing. But it is also clear that, if he has the political will to reform, he has the political means. The Socialists control not only the presidency and both houses of parliament but almost all regions, most departments and most major cities. And if they cannot persuade France’s truculent unions to embrace reform, who can?

It may not be attached to a bomb, but France’s clock is ticking; and it will tick faster in 2013 than it did in 2012. French presidents once enjoyed a seven-year term; now, since a constitutional amendment of 2000, they have five. Hollande has more power than any other European head of state, but he has only another year, maybe two, to make a difference before the first-draft history of this presidential term is written. Bonne chance!

soundoff(66 Responses)

Marine5484

Francois Hollande is an improvement over that Washington loving Sarkozy who practically reduced France to a virtual colony of the U.S. At any rate, France needs another Charles DeGaulle who'll lead that country out of the Eurozone and restore prosperity to the people.

Colony? I think not. Sarkozy was a refreshing breeze of cooperation in a France long self-centered. The article shows how socialist policies carried to their maximum in the end create a space with no room for maneuver – this is the future of which we should beware. France and so many of the "socialist paradises" of Europe are on a losing course – "soaking the rich" may make the teeming masses feel good, but it is not the answer. The answer is cut back on spending.

It is great to be a Socialist when you have other's hard working income to spend on freeloaders and generous pension benefits. Take note USA!

December 21, 2012 at 11:05 am |

cutbackonspending

Oh my, the world economies will collapse. For 60+ years its spend for growth. Now its time to reverse this. But as Governments cut back, so must everyone else. The problem is, is that everyone is accustomed to the status quo. For me, less is more and I take every opportunity to downsize so I can ride out the new world order.

December 25, 2012 at 8:45 am |

Ted

Charles DeGaulle – a guy who rode on American tank to Paris in 1945, and whom US let lead the parade out of sensetivity for French?

For sure american don't like DeGaule as thanks to him France did not become an american occupied territory :)

December 19, 2012 at 8:45 pm |

Cheerios

No – it was the French 2nd Armored who liberated Paris, after having fought in Normandy. Besides, given the Americans chose to give recognition to Vichy up until 1942, then tried to supplant De Gaulle with Vichy-associated yes-men, the least they could do was give him a tank....only thing he didn't ride in on a tank, but Citroen car. De Gaulle remains the best son France produced in the 20th century. without him, France would have either gone red or become a US vassal state thanks to AMGOT.

Asking people here to read some history before commenting is akin to trying to get someone to swim with concrete flippers, but you can all start with a book called "Allies at War" by Simon Bertheon. An eye-opener piece of work that could teach many Americans something useful.

December 19, 2012 at 8:47 pm |

Marlin

Before lecturing upon knowing history, you should check your facts. Yes the unit liberated Paris. However, it was organized under the US light armored division organization.

December 20, 2012 at 1:30 am |

The Decline

De Gaulle was an arrogant, useless commander who was hated by nearly everyone. The US liberated France officially and let De Gaulle ride in as the victor to give the French hope and pride. De Gaulle then lambasted the US, insulted our presence and the French have never liked us since.

December 20, 2012 at 1:05 pm |

Otan112

for all Americans who spit on the history of France, please open a history book.

December 25, 2012 at 10:23 am |

Caiha

It's more or less true. For most of our history we loved France, but as soon as we stopped being a bunch of backwards bumpkins and became a power in our own right, France has resented it, and we've stopped liking France because of that very resentment. Respect is a two way street. Don't expect us to give you any when you habitually give us none.

December 26, 2012 at 1:48 am |

cheeseroll

France has spent the last few decades with ridiculous working hours, massive welfare abuse and low worker productivity and you blame its economic problems on it being a "US puppet"?

No – I'm saying had France become a US puppet, it would have much, much worse.

December 20, 2012 at 7:37 pm |

Otan112

I think you know you are wrong. You cant' be so stupid.

December 25, 2012 at 10:21 am |

daisy

I am french.....and am shocked of most of the opinions I could read about De Gaulle and the French. Firstly if De Gaulle would not have been there.....I do even not want to imagine the outcome! of course.....it is not your country.......about poor working hours, let me insist that all appreared with socialism that caused all the disasters in the french industry! it is a major fault to reduce working to 39 then to 35 hours a week.before that, we worked long hours and full weeks....and of course there is an abuse on social help.
Be assured that we all, as french know that Americans played a major role on the french liberation. It has never been denied or hidden in order to give more favour to De Gaulle! and it is of course a sad memory...even if I have not lived in that period, it is always a huge source of emotion. Please come over, visit France, you will see that we appreciate the Americans!
best wishes from France
Daisy

Complaints about Sarkozy by Hollande supporters after the fomer is no longer in office harken to complaints here in the USA by some feckless Democrats about George W. Bush. They don't want us to reflect on the manifest weaknesses of the current government, so they keep reminding us of the previous one. Bill Cinton did a masterful apologia on behalf of President Obama recently, striking that very same note. Sooner or later, however–and assuming that democracy is a valid form of government–the electorates in both France are going to run out of patience with ruling factions who have run out of ideas.

The two leadership rivals in centre-right UMP party, Jean-Francçois Copé and former Prime Minister François Fillon have agreed to hold a re-run of their controversial leadership election before October next year.

Perhaps because some people like to work? No that can't be it. Who could like painting, or carpentry, or making things that last longer than you will be alive... A perfect society would be one in which people who want to work can and those who don't do not have to.

December 27, 2012 at 5:03 pm |

Quigley

The French would have done far better by electing Marie Le Pen and the members of the National Party into office last year in stead of these so-called "moderates". That way, France may have been taken out of the cursed Eurozone and put back on the path tp prosperity. In fact, Europe today needs right-wing extremism like it did back in the 1920's but does anyone have the sense to see that? Evidently not, unfortunately!

I hope you were being sarcastic. Right wingnut, left wingnut, national socialist democrat, facist, whatever. What you are invoking is the emergence of a ruthless tyrant to fix the things that apparently don't fix themselves. Mussolini made the notoriously unpredictable trains of Italy run on schedule – probably only required the beatings and deaths of a few hundred railway workers and union representatives. What the heck? The German chancellor put everyone back to work in the 1930s- building a war machine. The Europeans haven't had a good mass extinction event in almost 70 years – that ought to help change the focus of their problems. Chances are that the fools who lent them money will be the first to be exterminated. There is historic precident (look what happened to the Templars who were the major crditors of the French king and oops – the Roman church).

It's telling that at 90% of GDP, France's debt is considered scary. In the US, our public debt is now over $16T, but we passed up our 1:1 ratio on GDP to debt last year – our GDP stands at $15T. So, we're in much worse shape than France on this critical measure of fiscal health. Obviously a big difference is that we control our currency, and France does not control it's. But that only goes so far. Europe is dealing with it's debt problem, albeit slowly and erratically. The US has yet to do this, and fiscal cliff negotiations look like the can will be kicked further down the road again...

France's experiment with socialism is leading to wonderful prosperity there. 11% unemployment, debt to GDP ratio of over 100%, private employers, like the steel mill, wanting to layoff due to all the taxes and regulations the government is imposing, and then threatening to take over the mill if they do lay off (sounds more and more like America?), will only lead to a boom in economic growth. The French young people,with a very high uemployment rate from companies wanting to make an exit there and not hiring (can you blame them), have great hope!

But, folks, lets rejoice in a wonderful French government and new socialist president! At least bankrupt Greece just had their bonds upgraded by Standard and Poors. Austerity does seem to work, well, to a point.................

Considering Hollande has been in office for a number of months following numerous centre-right governments, its hard to blame France's economic woes on a "socialist experiment" – indeed the Nordic countries and Netherlands have enjoyed lower unemployment than France for a generation in part by shifting costs for many benefits from the private sector to the public. Whomever reforms the French labor market – making it easier for companies to hire and fire – will help fix France's economy IMO. It matters not what party they belong to. As much as I respect Sarkozy, he was unable to deliver on this.

The only reason the socialist economies of the nordic countries have not collapsed is because their mineral extraction wealth has been sufficient to pay for the benefits required by a small population. Greece didn't have any mineral wealth to speak of. They also have coherent cultures that strongly encourage care for each other, self discipline, working, and discourage being on welfare.

December 19, 2012 at 6:02 pm |

TownC

A factor in good government is strong opposition! I wonder if that applies here? Doesn't this mean that both sides must compromise! I hope both parties in our nation compromise so we can move forward and worry about trying to build a better future. Instead of worrying about who may be to blame if things go wrong, lets get a compromise and move forward. The future of our country is more important than politics.

I'm guessing you missed the memo. Neither party perceives the need to compromise. Something about fiddling while Rome burns (because once burned down the political class believes they will have a free hand to rebuild it to their liking). The usual scenario at this stage in the life of a government is the emergence of a ruthless tyrant who consolidates power.

It's quite inexplicable isn't it. If they have any sense I have the fenelig that they will have reset it by the weekend. At least set this as the default and give users the option of re-enabling the old style replies via their settings. Maybe a bit of Bernie Ecclestone style smoke and mirrors stuff is going on do something that causes a rumpus and creates lots of press and then suddenly change your mind and start saying the exact opposite a week later

You need currency to trade electronically in today's world. But everybody being connected and depenedent on each other is a real conumdrum. In the old days you worked for your food clothing and shelter and your economoy was affected by you and the local king and how much he took. Nowadays where do you work? We are closing stores due to internet. Farms are run by tractors so we do need a social safety net. On the other hand socialists or linked to the world market and so they cannot totally manage their own nation and so other nations debt, resources, etc all affect us. A real conundrum. Big government is wasteful but just not control leaves too many to suffer.

France has to many lazy Muslims. Indochineses (Cambodians, Lao, and Vietnameses) are not White enough to blend in with Francaise. Well! Bon Chance France. Thank You USA, Canada, Australia, and New Zealand for having us Indochineses.

While we are at it, should US Government plunge down the so called fiscal cliff – it would set off very serious consequences of reactions from the global financial sectors. If the US debt ceiling is not resolved, US could enter a deep and long recession and resulting in the world abandoning the US$. US$ bonds and securities would become cheap sale items as panicky US$ investors flee.

If that happened, the US$ might just collapse..... and I leave you to imagine what this could mean to Americans at large.

The Republicans I think are playing with fire, and Americans could get burned by GOP's stubborn self interest handling of the fiscal cliff.

I do hope your kidding, because both parties are playing with fire not just the GOP, both parties need drastic reform, and congress needs to be entirely replaced, this is one of those times where everyone is wrong

At least under Hollande France withdrew from Afganistan-a smart move which will save money. The Globalist Agenda needs to be abolished to improve things.The international bankers need to be put in check, derivatives taxed. If Depardeaux, the rich actor does not want to pay taxes he needs to be banned from France. Charlie Chaplin got rich in the US and did not want to pay his share so he went ro Switzerland , not a good American – a similar story. The choice that needs to be made is to support majority of French people or cow tow to international bankers. In the past the bankers ruled-now we will see if there is anything new under Hollande.

Like other nonsense articles the emphasis is on austerity. The US is in a worse shape than France and the real issues are hidden behind a fake issue (Fiscal Cliff).Unfunded wars, unfunded bank bailouts and generally welfare for the rich is not discussed much. The whole economic policy of the US is dedicated to saving the 4 banks "too big too fail ", but the fact is hardly even mentioned. What the people in the US will most likely get , in spite of the circus rethoric , is double barrel austerity which will depress the economy further. The big talk of $1.3 Trillion over 10 years is peanuts ! Let us break it down. $130 billion/year is equivilent to 3 months of our wars. If we stopped ALL WARS we would save $520 billion per year but there is not even a discussion about the obvious. From what I can see France is moving in the right direction and have a circus.

They are still there, just held hostage by their newfound socialism as they watch millions of Arabic North African immigrants take their jobs ruin their cars, and bring a little bit of the third world with them.

I do hope Europe out grows this crisis, the United States' "advice" has reduced Europe to a fraction of its capability, Europe once was vibrant and heavily industrial, managing many colonial interests, France England and Germany were the face of tomorrow, now they are hollow shells, Europe needs to once again boom, France will always have one of the best militaries on the planet, and boasts a large amount of connections with former possessions world wide, even the Chinese think highly of the French, rating them on their personal national power index as a close third

You can find some fascinating points in time in this write-up even so I don know if I see all of them middle to heart. There might be some validity but I'll consider hold opinion until I appear into it further. Superb write-up , thanks and we want extra! Additional to FeedBurner as well 萬用行動電源 http://www.powerbankdigital.com

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